Milk Protein Products and Related Government Policy Issues

emoved from the milk, thereby substantially reducing costs of transporting the milk
solids. Drying the products to produce MPCs further reduces the transportation costs.
The transportation benefit is applicable only for long distances because of capital and
operating costs associated with UF equipment. UF milk protein products are regarded as
valuable for making cheese products because of their high protein and low lactose
content (GAO report).
The GAO report states that in the 48 contiguous states there were 22 dairy manufacturing
plants, mostly cheese plants, with UF equipment for milk. Of that number, at least five of
these plants transported some UF milk protein products to other plants. The number of
plants may have grown since publication of the GAO report in March 2001. However,
statistics concerning plants with UF equipment are not readily available.
The Distinction between Chapter 4 “Milk Protein Concentrates” and “Milk…In
Powder, Granules, or Other Solid Form”
With respect to the debate concerning milk protein products, dairy producer groups have
had the strongest objections to imports of MPCs that are produced through blending of
various milk products. They claim, for example, that NDM can be easily mixed with dry
milk protein ingredients to circumvent TRQs. On September 18, 2002, Customs entered
a petition from National Milk Producers Federation (NMPF) into the Federal Register. In
the petition, NMPF contends that Customs, in two previous rulings, had misclassified
certain imported dairy protein blends as MPCs (HTS code 0404.90.10) and that these
protein dairy blends should be classified as “milk…in powder, granules, or other solid
form” (HTS code 0402.10, 0402.21, or 0402.29, depending on fat content). While the
two challenged rulings state the composition of the products, they do not mention the
method of manufacture. Supporting documents relevant to the rulings were lost in the
destruction of the New York Customs House at the World Trade Center on September
11, 2001. The product of one of the challenged rulings contained “lactose (42.2 percent,
+/-0.5 percent), protein (41.5 percent, +/-0.5 percent), ash (8.2 percent, +/- 0.5 percent),
moisture (4.1 percent, +/- 0.3 percent), and fat (2.5 percent, +/- 0.5 percent).” The other
product contained “41 percent protein, 29 percent fat, 7 percent minerals, and 6 percent
moisture.” According to the Federal Register notice, NMPF asserts that:
• The products in question are not “complete milk proteins” for two reasons:
o They do not contain “both casein and lactalbumin in the same, or very nearly
the same proportion, relative to each other, as they are naturally found in skim
milk.”
o They do not retain the functional properties of proteins as they occur in skim
milk.
• The term “concentrate” requires that the product has been concentrated by reduction
“in volume or bulk by the removal of liquids and other ingredients.” According to
NMPF, the products in question cannot be said to have been manufactured through a
process of concentration.
6